Traffic Acquisition Cost - TAC

AAA

DEFINITION of 'Traffic Acquisition Cost - TAC'

Payments made by Internet search companies to affiliates and online firms that direct consumer and business traffic to their websites. Traffic acquisition costs (TAC) are a critical cost of revenue for Internet search firms such as Google, Yahoo and Baidu.com. TAC for these firms is watched by investors and analysts to ascertain whether cost of traffic acquisition is rising or declining. Rising TAC has a detrimental effect on profitability.




INVESTOPEDIA EXPLAINS 'Traffic Acquisition Cost - TAC'

Many Internet companies report revenues both on a gross basis, and on a net basis that excludes TAC. One key metric for these companies is TAC as a percentage of advertising and search revenue, with a rising percentage indicating cost pressures on profitability. Sometimes companies will mention payments excluding traffic acquisition costs using ex-TAC.

RELATED TERMS
  1. Baidu

    The dominant Chinese internet search engine company. Baidu offers ...
  2. Banner Advertising

    A rectangular graphic display that stretches across the top or ...
  3. Click-Through Rate (CTR)

    The percentage of individuals viewing a web page who click on ...
  4. Consumer Internet Barometer

    A quarterly survey report produced by the Conference Board and ...
  5. Cyber Monday

    An expression used in online retailing to describe the Monday ...
  6. Viral Marketing

    Internet advertising or marketing that spreads exponentially ...
RELATED FAQS
  1. What is a "phishing scam" and how can they be avoided?

    The term phishing (as in fishing for confidential information) refers to a scam that fraudulently obtains and uses an individual's ... Read Full Answer >>
  2. How is a tender offer used by an individual, group or company seeking to purchase ...

    A tender offer is made directly to shareholders in a publicly traded company to gain enough shares to force a sale of the ... Read Full Answer >>
  3. How does a company record profits using the equity method?

    A company that invests in another company and has majority control of it would record profits using the equity method. This ... Read Full Answer >>
  4. How does horizontal integration allow companies to share resources?

    In a horizontal integration, a company either acquires another company or merges with that company. This allows the resulting ... Read Full Answer >>
  5. What is the outlook for mergers and acquisitions in the utilities sector?

    Mergers and acquisitions (M&A) in the utilities sector will likely continue at a brisk pace for the foreseeable future, ... Read Full Answer >>
  6. Why should management teams focus more on horizontal integration?

    Management teams should focus more on horizontal integrations because they allow for economies of scale, economies of scope, ... Read Full Answer >>
Related Articles
  1. Options & Futures

    10 Tips For Choosing An Online Broker

    This important investment decision happens before you pick your first stock. Find out how to get it right.
  2. Entrepreneurship

    From The Printing Press To The Internet

    Find out how this invention contributed to the development and evolution of the U.S. economy.
  3. Personal Finance

    Avoiding Online Investment Scams

    Find out how to spot internet fraud and protect your hard-earned money.
  4. Personal Finance

    Tips For Keeping Your Financial Data Safe Online

    Find out how to protect your personal information from phishers, scammers and thieves.
  5. Investing

    How To Profit From M&A Announcements

    We look at four strategies that seek to profit from merger and acquisitions announcements.
  6. Stock Analysis

    The CVS Target Deal: A Healthy Union?

    The CVS Health and Target deal should be a win for both. Here's an analysis with a twist.
  7. Investing News

    Most Important Mergers And Acquisitions Of 2015

    Nearly halfway through the year, 2015 is proving to be a big one for mergers and acquisitions.
  8. Fundamental Analysis

    Explaining Capital Employed

    Generally, capital employed refers to all of the assets used in a business that contribute to the company’s ability to earn revenue.
  9. Investing

    Salesforce Buyout

    It’s been over a month now since buyout rumors first began to circulate after sources revealed that Salesforce, the biggest cloud computing software company, was approached by a potential buyer. ...
  10. Entrepreneurship

    How to Exit Your Small Business with Grace

    Here is a guide for how best to leave your baby — your small business.

You May Also Like

Hot Definitions
  1. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  2. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  3. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  4. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  5. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  6. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!